EBT payment processing is a method of clearing and settling transactions (obtaining verification of transaction). EBT stands for Electronic Benefits Transfer. It is the system that was set-up by the government to help welfare recipients with food, cash, and rental assistance. These payments are made through state and local governments who distribute federal financial assistance through their designated Electronic Bank Account. In general, EBT systems are tied directly to the food stamp system.

How does an EBT Payment Work?

EBT payment processing requires two account types to work properly: one bank account and one prepaid card or debit card. The bank is used for direct deposit of benefits each month while the debit cards are used to make purchases at the supermarket. In some cases, recipients use both a bank account and a debit card in conjunction with each other. The money is distributed from either a Federal Reserve Bank or via Direct Express®, a private company that distribute funds for free on behalf of the U.S. government.

When a recipient makes a purchase it is automatically deducted from his or her account. There are no cash withdrawals because the card cannot be used for such transactions. The recipient uses the card to buy groceries and essential items like diapers and gasoline. Each month, a pre-set amount of money is added to each person’s EBT payment processing account depending on how many people are living in the home.

How is the EBT System Funded?

The government provides the funding for each account and all necessary equipment and fees (including ATM, POS (point of sale), and web-based services) is paid by the merchants who accept the debit card as payment. In some cases, recipients may be required to pay a small fee of $1.00 and may be charged up to $5.95 each time their card is checked at an ATM or POS terminal.

Who uses an EBT card?

Any household can receive benefits under the Supplemental Nutrition Assistance Program (SNAP) if they meet state and federal eligibility guidelines. SNAP beneficiaries receive their food stamp allocation on an Electronic Benefit Transfer (EBT) card which resembles a bank debit or credit card. The EBT card is used like cash at most supermarkets and convenience stores.

Who administers the EBT system?

In most cases, a state or local government agency is contracted to administer and manage SNAP through an Electronic Benefits Transfer (EBT) card. The benefits recipient receives may come from a Federal Reserve Bank as in New York State or from a private company as in Ohio. In either case, the benefits are placed into the recipient’s account each month.

How does someone apply for EBT?

Households must meet State residency requirements, provide necessary verification of identity and be certified by income limits set forth by Federal law. Households with an elderly or disabled person can apply online through the state agency website (except California) or at their local SNAP Office. Those who are not computer-literate can also apply in person through a local office. If you want to apply online check the eligibility list of states and apply directly on the state eligibility page.

How do I get my EBT card?

Once someone is approved for food stamps benefits, the state prints an EBT card. It looks like a bank debit card and can be used at any store that allows food stamp purchases. You can use it to buy household products or personal items, but not hot foods or alcoholic beverages because the federal government does not allow this type of transaction. If someone prefers cash, they risk losing their benefits if they sell their EBT card. This is a crime under Federal Law and can result in prosecution.

What food items are covered by SNAP benefits?

SNAP benefits can be used to buy any edible item that people eat including breads, cereals, fruits, meats (excluding pork), vegetables, dairy products like cheese or milk, juice, fish, poultry and seeds to grow food for personal use.